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London

Dinner in honour of Sir Peter Roth (Competition Appeal Tribunal)

Dinner organised by Concurrences with keynote speaker Sir Peter Roth (Competition Appeal Tribunal), in partnership with White & Case.

Dinner in honor of Sir Peter Roth Video interview 30 October 2019 – London

Sir Peter Roth:

What I am going to talk about at the dinner kindly organized by Concurrences, is prompted by two developments.

First, there are all the discussions surrounding Brexit. As of today, we don’t know whether Brexit definitely will happen. The only thing that’s certain about Brexit at the moment, as I speak, is that nothing is certain. But it’s led to a lot of debate and consideration about how things in Britain might continue outside the EU.

The second thing that has prompted my topic is the letter and proposals by the new chairman of the CMA, Lord Tyrie, to the Secretary of State in February — in particular, that part of the proposals concerning the appeal process in competition cases. There has been general discussion about the institutional framework that applies for the enforcement of competition law — and I mean here, the public enforcement of competition law. One can broadly divide the institutional design between an administrative framework, where the decision is taken by the competition authority, or agency, which is then subject to challenge before a judicial body; and secondly, a prosecutorial framework, or system where the competition authority acts as investigator, and brings the case before a court or tribunal. Then it is the court or tribunal that actually takes the decision, imposes the penalty, applies the remedies, and so on.
Those two models are reflected in different countries around the world. While the substantive principles of competition law are now common ground in most of the very many countries that have a competition law, the institutional framework is actually quite varied.

The framework we have in the UK, which is the administrative model, is absolutely taken from the EU framework: a decision by the EU Commission and then challenge before, now, the General Court. The striking difference between the UK and the EU is that we have a specialist court in the Competition Appeal Tribunal, whereas in the EU, appeals go to the General Court which is, as its name indicates, a general court. Nonetheless, both regimes have the administrative model.

Not every country in the EU has that model. Austria, I think Sweden, and Finland have more a prosecutorial model and so does Ireland. And Ireland is interesting, because it’s a common law country.

If we look across the common law world, Canada, Australia, New Zealand, South Africa, which has a very active competition enforcement, Hong Kong, I believe Singapore, and so on, we find they have the prosecutorial model in various variations. Often there is a difference between mergers, where the authority may take the decision, and antitrust where the authority prosecutes.

One of the points made by Lord Tyrie is a concern about the overall time taken where the authority produces a long, detailed decision; then there is a full appeal to the CAT, where many of the points may be argued again; and then the CAT writes a full judgment. His suggestion is that the appeal standard and process should be much reduced and curtailed to, in his view, a judicial review as applied in public law.

I think that’s deeply problematic, because when you’re talking about antitrust, the CMA is imposing significant fines in many cases. It is now well established in both Strasbourg and the European case law that these are quasi-criminal cases for the purpose of article 6 of the Human Rights Convention. The first time the case comes before an independent judicial body is on appeal. As a consequence, there has to be a full right of appeal. I really do not see any realistic prospect legally of getting away from that, quite apart from the fact that I think a lot of people would regard it as unjust if they cannot challenge heavy fines before an independent judicial body through a full challenge on the merits of the decision.

We are a common law country, and our appeals, when you are challenging a case on the merits, will involve cross examination. That is deeply embedded in our system, and we also attach, I think quite rightly, value to oral argument.
The suggestion that we should, in the UK, make the CAT operate more like the EU General Court seems to me a little strange. First of all, we are in the process of considering distancing ourselves more from the EU rather than getting closer. Secondly, the General Court’s procedures on appeal have received a lot of criticism over the years, because they were not thorough enough. The General Court has responded by becoming much more thorough in its scrutiny and challenge to the findings of fact and economic analysis of the European Commission. The recent Servier judgment is a striking example of that.

So, I don’t think the answer is to reduce the appeal standard. But I do think it’s worth giving serious consideration to whether one should not move to the prosecutorial system favored by most other common law countries. It would solve the problem identified by Lord Tyrie, which I can quite understand as a concern. The Authority then would not spend, sometimes I think, several years and no doubt a lot of resources on having to draft and redraft a decision, and sometimes put it, or sections of it, in draft to the parties for comment. They could concentrate on bringing cases in a much sharper way as the prosecutor. There would then be one decision that would come from the CAT.

When one looks at how systems work across the world, I think we here have a very distinct advantage over some of the other countries in that we have a specialist competition court in the CAT. Some of the problems that may be experienced in one or two of the other systems arise from the fact that cases go before the general courts and before judges who no doubt are very able, but are less experienced in competition law, or sometimes have very little or no experience in the field. I don’t think anyone is seriously suggesting that we should do away with our specialist court. Indeed, I am very impressed when I travel around the world taking part in legal and judicial conferences by the very high regard in which the CAT is held internationally. That is of course a great tribute to my two predecessors as President. We will keep our specialist court, and that gives us the opportunity to use it as the decision-maker, the primary decision- maker in antitrust cases, avoiding therefore this duplication of time and effort.

What may be the disadvantages? Sometimes one hears there is concern that the Authority would lose control of the competition agenda. I think that is misconceived. The Authority would first of all be deciding what cases to bring, and on what grounds to bring them. That in itself exercises enormous influence. Secondly, it would issue exemptions. Block exemptions play a hugely important role in antitrust law. Thirdly, it would continue to engage in settlements. In many of the cases, an increasing trend in recent years is that antitrust cases result in settlements. Finally, the Authority could continue to issue guidelines, as the Commission has done in Europe and the CMA and previously the OFT have done. So I think any fear that it will lose influence on policy are hugely exaggerated.

A second concern sometimes voiced is cost. I think that is far from straightforward. If there were to be a full prosecution of a multi-party cartel before the Competition Appeal Tribunal, I can see that the cost of that would be very significant, and then of course there could be an appeal. But many of the cartel cases now, indeed I think most of the cartel cases in Europe, tend to involve settlements and in such a case there is no court hearing at all. That wouldn’t change under such a prosecutorial system. Even if the cases settle, as they often might, after proceedings are started, there would still not be, in my view, a serious increase in cost. Indeed, there might be a significant reduction in cost, because all the time, effort and manpower engaged in drafting decisions at the Authority level would be avoided.

Indeed, I suspect that more cases indeed might result in settlement. I would not be surprised if the senior executives would be much more reluctant or anxious about giving evidence and being cross-examined in a public hearing in a court, as opposed to simply taking part in an administrative procedure before the Authority. That could feed through into a much greater willingness to settle cases.

But I do not suggest that this is the answer and that we should definitely move to such a system. What I am suggesting is that this is something that we should think about very seriously. We should do some empirical research on the experience of other systems which have the prosecutorial framework, looking at those where there may be a specialist tribunal involved, such as Sweden and Finland and South Africa, and those where there is no specialist tribunal.

Altogether, given the concern raised by Lord Tyrie, this merits very serious consideration. The fact that we may be leaving the EU makes it also very timely now to see what is, going forward, the optimal method for us to use, bearing in mind that no system is ever going to be perfect. Those are the ideas that I shall be discussing in the course of the dinner that Concurrences has arranged.

Photos © Emilie Gomez

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  • UK Competition Appeal Tribunal (London)
  • White & Case (London)

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